Updated: February 14, 2022

Getting a Mortgage on an Uninhabitable Property

Looking for a mortgage on an uninhabitable property? There are options! Find out exactly what to do next if your next home is derelict and you need finance.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: February 14, 2022

When buying a property, some people prefer that it’s finished to the highest standard, while others prefer to take on a project. But at what point does a “fixer-upper” cross the line into uninhabitable? And can you still get a mortgage?

The guide will answer those questions and help you prepare to take on and finance a major renovation. Read on to find out what mainstream mortgage lenders class as ‘uninhabitable’, how to get a mortgage on this property type and much more.

Read on for more information or jump straight to a topic on the menu below…

What do mortgage lenders class as an ‘uninhabitable’ property?

The exact definition varies from one lender to the next, but the key thing to keep in mind is that a property doesn’t need to be in prime condition to be considered habitable, as long as it’s safe, secure, warm, and dry.

It would, however, be considered uninhabitable by most mortgage providers if it has any one of the following issues:

  • It is not watertight or windproof (particularly concerning the roof, see below)
  • The external doors and ground floor windows cannot be made secure
  • It lacks a basic kitchen with appropriate plumbing and electrics
  • It lacks a functional, indoor bathroom with a toilet
  • It has no heating or electricity, or the system is unsafe
  • It presents a health risk to occupants, e.g. serious damp, mould, or asbestos
  • It puts occupants at risk of injury, i.e. it does not comply with building regulations

In general, it’s not possible to get a mortgage on a derelict or uninhabitable property. However, we’ll explain in a moment how to get around that.

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How the property’s roof type affects your mortgage options

As we’ve mentioned, a property must be watertight and windproof to be considered habitable. As such, the roof type is a major factor in your ability to get a mortgage.

Here are some details about various roof types….

Slate or tile roof

Lenders prefer a conventional roof made of slate or tile. This roof type will not pose a problem to getting a mortgage – unless it’s badly damaged.

Flat roof

Flat roofs are considered non-standard construction and are prone to damage and leaks and have a limited lifespan. So, they can present a barrier to getting a mortgage. Some lenders, including TSB and Barclays, will consider them on a case-by-case basis.

Felt roof

A mineralised roof can be an issue when applying for a mortgage. If it is part of the building’s original construction and is in good condition, you’ll have a better chance of success.

Thatched roof

Thatched roofs need a lot of maintenance to remain watertight. Your approval might be subject to adequate insurance and the establishment of a repair and replacement schedule. The brokers we work with can make sure you find the right insurance policy.

Tin roof

A tin roof alone is not a factor that would lead your mortgage to be declined. The lender would consider it within the context of the property condition, valuation, and the surveyor’s comments.

How to get a mortgage for an uninhabitable property

There are many reasons why you might want to buy an uninhabitable property. It could be a unique or historical building that you’d like to restore to its former glory. It could be a structure with potential that you can project your vision onto. Whatever your reason, we’d suggest you take the following steps.

Step one: Identify the issue

You may have already applied for a mortgage and had your application declined. In that case, you can speak to the lender to find out why, specifically, it was deemed uninhabitable. The reason may also be immediately evident, for example, if areas of roofing are missing or there is no plumbing system.

If you’re unsure whether your property would be considered habitable or uninhabitable, consult the list above to identify the issue. It might also help to look at current building regulations.

Step two: Determine whether the issue can be repaired

If you already own the property, you may have another way of financing essential repairs besides getting a mortgage. You could use savings, ask for help from a loved one, or apply for finance to fund the renovation, such as a bridging loan.

If you are planning to buy the property, you can speak to the estate agent or vendor to ask if they are willing to carry out the relevant renovations. If they refuse to pay, you could fund the work yourself, although there is some risk involved when spending money on a property you don’t yet own.

Once the renovations are complete, you may be able to resume a previously declined mortgage application. Otherwise, you can begin a new application. Or if you can’t complete the repairs, you still have other options.

Step three: Speak to a specialist broker

At this stage, it’s best to speak to a specialist. Working alone, it’s unlikely that you’ll find a suitable mortgage for your property, so you’ve probably reached the end of the road with your renovation project. An expert can advise you on your remaining options, which include:

Mortgage retention

This is when a lender approves your mortgage but only releases a portion of the funds immediately. With that money, you can finance the renovations that are necessary to make the property habitable, within an agreed time frame. Afterwards, your lender will release the remaining funds.

Second charge mortgage

If you already own your own home and are looking to buy a derelict property as well, a second charge mortgage is an option. This second mortgage can be secured on your existing home (as well as your residential mortgage), rather than on the uninhabitable property.

Bridging finance

A bridging loan is an alternative to a mortgage, which is supplied by lenders with a higher risk tolerance. If they consider your project viable, they will provide a loan to cover the renovations you’ve planned. When the work is complete, you can apply for a mortgage on the property, or sell it, to serve as your exit strategy, which must be approved by the lender in advance.

Eligibility requirements

All these financing options have eligibility requirements, just as a conventional mortgage does. Here’s a brief overview of those requirements.


You’ll typically need at least a 10% deposit for a standard mortgage. This is the same when applying for a retention product, but larger deposits will be considered more favourably. For a second charge mortgage, you’ll typically need at least a 20% deposit, and for a bridging loan, at least 25%.


For a second-charge mortgage or retention product, you’ll need to pass the lender’s affordability assessment. For bridging finance, there isn’t an income assessment as the lending decision will hinge on the strength of the exit strategy.

Credit history

For any of these forms of financing, a lender will perform a hard check to look at your credit history. If you’d like to know what they’ll see, you can download your own credit report. Keep in mind that having bad credit might harm your chances of approval, but there are specialist lenders who have the flexibility to take a broader view of your application.

Can you get a mortgage if you’ve been refused one previously?

Yes. If your mortgage application was declined, your options are:

  • To complete the work identified as a habitability issue in your mortgage application and appeal to your lender.
  • To apply to a different lender, who takes a more favourable view of the habitability issue identified.
  • To apply for one of the alternative forms of financing mentioned above.

Remember that your chances of mortgage approval are far higher if you work with a broker who specialises in securing finance for properties that have been deemed ‘uninhabitable’. They will help you to identify the right lenders and prepare your application for success.

Get matched with a specialist broker

The financing options we’ve discussed are specialist in nature and it’s best to work with someone with specific knowledge of this corner of the market. A broker who works with conventional, residential mortgages may not have the expertise you need.

Luckily, we have access to a large network of brokers with skills in highly specific areas and can match you with someone experienced in mortgages for uninhabitable properties. To use our broker-matching service and arrange a free, no-obligation chat with one of these brokers, simply call us on 0808 189 0463 or make an enquiry online.

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Looking for a mortgage on an uninhabitable property? There are options! Find out exactly what to do next if your next home is derelict and you need finance.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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